Correlation Between CITIC Telecom and INTER CARS
Can any of the company-specific risk be diversified away by investing in both CITIC Telecom and INTER CARS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CITIC Telecom and INTER CARS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITIC Telecom International and INTER CARS SA, you can compare the effects of market volatilities on CITIC Telecom and INTER CARS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CITIC Telecom with a short position of INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIC Telecom and INTER CARS.
Diversification Opportunities for CITIC Telecom and INTER CARS
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CITIC and INTER is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CITIC Telecom International and INTER CARS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTER CARS SA and CITIC Telecom is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CITIC Telecom International are associated (or correlated) with INTER CARS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTER CARS SA has no effect on the direction of CITIC Telecom i.e., CITIC Telecom and INTER CARS go up and down completely randomly.
Pair Corralation between CITIC Telecom and INTER CARS
Assuming the 90 days horizon CITIC Telecom International is expected to generate 4.59 times more return on investment than INTER CARS. However, CITIC Telecom is 4.59 times more volatile than INTER CARS SA. It trades about 0.07 of its potential returns per unit of risk. INTER CARS SA is currently generating about 0.03 per unit of risk. If you would invest 9.89 in CITIC Telecom International on November 5, 2024 and sell it today you would earn a total of 18.11 from holding CITIC Telecom International or generate 183.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITIC Telecom International vs. INTER CARS SA
Performance |
| Timeline |
| CITIC Telecom Intern |
| INTER CARS SA |
CITIC Telecom and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITIC Telecom and INTER CARS
The main advantage of trading using opposite CITIC Telecom and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIC Telecom position performs unexpectedly, INTER CARS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in INTER CARS will offset losses from the drop in INTER CARS's long position.| CITIC Telecom vs. Pentair plc | CITIC Telecom vs. Tianjin Capital Environmental | CITIC Telecom vs. Alaska Air Group | CITIC Telecom vs. AIR LIQUIDE ADR |
| INTER CARS vs. CREO MEDICAL GRP | INTER CARS vs. JAPAN AIRLINES | INTER CARS vs. CompuGroup Medical SE | INTER CARS vs. China Eastern Airlines |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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